Major appointments were completed for Xi Jinping’s third term during two sessions of the National People’s Congress and Chinese People’s Political Consultative Conference in 2023, consolidating his one-man rule. However, the decisions by the two sessions undermined the ability of the Chinese Communist Party (CCP) to respond swiftly to the changes of the time and to devise new alternative proposals. China’s economy grew 3% last year, the lowest since economic reform and opening-up began in 1978. This year’s growth target is around 5%, lower than the expected level. This is giving rise to speculation in the West that the time of “Peak China” has arrived. The government work report delivered at the two sessions did not present bold policies on the population issue, one of the most pronounced factors in the Peak China thesis. Organization reform only stressed ideologies and loyalty toward Xi. The CCP’s control over the government was strengthened instead of efficiency and expertise that could boost economic growth. Although the two sessions raised the possibility that China will reach a peak during Xi’s third term, a sharp decline thereafter is unlikely. As the Peak China thesis argues, it would be difficult for China to pose a military challenge by invading Taiwan immediately, even if economic achievement cannot be used to justify Xi’s continued stay in power. Instead, China will more likely remain careful about its foreign relations by securing the legitimacy through achievements in alternative areas involving common prosperity, ideologies, law and order, and the Belt and Road Initiative. Lastly, the implication of the thesis on South Korea is that it should prepare for China’s gradual economic downturn, lowering its trade dependency toward China and boosting export of consumer goods. The ROK also should further engage in strategic communications with the goal of having the U.S. and China prioritize the Korean Peninsula and North Korean nuclear issues ahead of Taiwan.
